Legal Basics of Entreprenuership

What is a significant drawback of operating as a sole proprietorship?

• It is difficult to file taxes due to complex forms.

• The owner is personally liable for business debts and lawsuits.

• Business expenses cannot be used as tax write-offs.

• It is impossible to obtain any form of investment money.

Which type of partnership offers limited liability to all partners?

• General Partnership

• Limited Partnership

• Limited Liability Partnership

• Silent Partnership

What is a key characteristic of a Corporation (C-Corp) regarding its legal standing?

• It is considered an extension of the owner's personal assets.

• It is primarily designed for social good over profit.

• It offers limited liability protection to its owners.

• It cannot sell stock to the public for funding.

Which statement accurately describes a Limited Liability Company (LLC)?

• It offers unlimited personal liability to its owners.

• Its profits are taxed at both the corporate and individual levels.

• It combines features of both corporations and partnerships.

• Its primary goal is to achieve social or environmental benefits.

What is a potential drawback of a cooperative business structure?

• Owners are personally liable for all business debts.

• It often faces challenges in securing external investment from traditional banks.

• Profits cannot be distributed to its members.

• It is legally required to operate as a non-profit organization.

What steps are needed on the path to start a business in your state?

• Get an Employee Identification Number (EIN) and check on your federal & state tax requirements

• Register your business with the Secretary of State

• Check with local government for business licensure requirements

• All of these steps are part of the process of starting a business